CHICAGO - The Chicago Public Schools' efforts to ease a liquidity squeeze by delaying a $634 million pension payment got caught up in the ongoing clash between Gov. Bruce Rauner and the House speaker over the state budget.
The freshman GOP governor blamed House Speaker Michael Madigan for the failed vote on the legislation Tuesday.
"Gov. Rauner and Republican leaders supported
The Chicago Democrat countered with a terse comment that offered schooling on the ways of the General Assembly.
The legislation filed earlier in the day -- after Chicago Mayor Rahm Emanuel, legislative leaders, and Rauner reached an agreement -- extends by six weeks the June 28 deadline for CPS' teachers' pension payment. The district - downgraded to junk last month by Moody's Investors Service -- faces a liquidity crisis and has warned of the difficulty in covering the payment as well as other obligations while making payroll and opening schools in September.
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The school district expects by August to have more cash on hand to cover the pension payment from July tax payments and an August state aid payment.
The legislation moved quickly through House and Senate committees but received only 53 of the 71 House votes needed to take effect immediately, which requires a three-fifths supermajority. There were 46 "no" votes with two voting present.
Democrats hold three-fifths supermajorities in both chambers.
It raised some eyebrows that Madigan, who voted for the bill, didn't push hard enough for the caucus to follow. Democrats countered that Rauner should have produced more Republican votes.
At a news conference after the House session, Madigan said of Rauner's statement: "To be issuing extreme press statements in the middle of consideration of the bill is not helpful .it's not how you do things in the legislature."
Madigan said he would try again on Tuesday and would "work between now and then to secure enough votes for it to pass."
"This is not a non-contentious bill," he said, adding that work is needed "persuading people that this is the right thing to do."
Rauner and the Democratic majority are locked in a stalemate over the budget for the fiscal year beginning July 1. The House has sent Rauner bills that make up the $36.3 billion general fund plan adopted by lawmakers who ignored Rauner's $32 billion plan. Rauner says he will consider tax hikes to make up the difference if lawmakers approve a series of items on his "turnaround agenda" including a local property tax freeze, tort reforms, and worker's compensation rules.
Rauner has primarily directed his attacks at Madigan and earlier this month launched an advertising campaign putting the blame on Madigan for blocking reforms.
Madigan has countered that Rauner is "operating in the extreme" when moderation is needed and should focus solely on resolving the budget alone with the policy issues considered separately.
Emanuel defended the pension payment delay in an interview Tuesday with the news program Chicago Tonight.
"This was a six-week reprieve to give everybody the time to come up with a comprehensive solution toward a more permanent solution that deals with what I refer to as the structural inequity in the system," Emanuel said.
The city and district, whose board members are appointed by the mayor, want the teachers' fund to be absorbed by the state fund or awarded greater aid to compensate for disparities in teachers' fund contributions. Chicago tax dollars go to support both the state teachers fund and the Chicago teachers' fund while suburban and downstate taxpayers only support the state fund. It's a contentious issue as some argue that Chicago system gets the lion's share of poverty funds to make up for the disparity.
"We pay as citizens of the state of Illinois and as residents of the city of Chicago," Emanuel said in the interview.
During committee and House floor debate on the delay, Republicans quizzed the sponsor on what the delay would accomplish and how CPS planned to tackle its long-term woes. They also said they hoped Democrats would remember their 11th-hour support for the legislation.
"What we are doing is giving the city and giving CPS a little bit of time to see if they can come up with resources, come up with solutions that will help us out of the fiscal problem," said the sponsor, Rep. Barbara Flynn Currie, D-Chicago.
"I'm not sure what six weeks does that can't be done in six days frankly," said Rep. Ron Sandack, R-Downers Grove.
The Chicago Teachers' Fund expressed disappointment in the delay, but officially took a neutral position.
A total of 37 House Democrats voted for the bill as well as 16 Republicans.
Not all members were present. Rep. Lou Lang, D-Skokie, voted against the bill to allow for another stab at passage if more votes can be garnered.
The school board is expected to approve Wednesday evening a $1.1 billion of short-term tax anticipation note and warrant borrowing for cash flow purposes through the next fiscal year. The district is saddled with $9.5 billion of unfunded pension obligations.
